Times pt25 Dec 2022 22:05
Among the companies in dispute with the government is Omega Diagnostics, which has been based in Alva, Clackmannanshire, since it was founded in 1987. In March, the company was forced into a firesale of its loss-making manufacturing site in Alva and its diagnostics business to a subsidiary of Orient Gene — one of the main Chinese suppliers of lateral flow tests to the government — to prevent the company’s collapse after a deal with the government fell over. The £1 million sale saved 93 jobs and diagnostics manufacturing at the site, but the outcome was bittersweet for Omega.
The company had instead been confident of growing the business by manufacturing Covid lateral flow tests at the site under a potentially transformative government contract.
Omega had used a £2.5 million pre-payment under a contract with the Department of Health and Social Care, alongside £11 million it raised from investors in June 2020, to increase manufacturing capacity and the workforce from 60 to about 200, ahead of the government licensing a test for Omega to make. Government-funded equipment was also installed in preparation.
Instead, the contract expired in October last year without the government licensing a third-party test to Omega. Its costs to support the anticipated manufacturing, meanwhile, had “substantially” increased.
Announcing plans to sell Alva in February, Jag Grewal, Omega’s chief executive and treasurer of the British In Vitro Diagnostics Association, the industry trade body, said it was “hugely disappointing that having acted in good faith to establish UK manufacturing for government-issued Covid tests, we find that these tests are, in the main, sourced from China instead”.
Further damaging relations and Omega’s prospects, the department is pursuing repayment of the £2.5 million funding, which Omega is disputing. The company has launched a “substantial” counterclaim, pursuing an additional £1 million-plus for losses under the contract.
In August Omega also sold to Orient Gene, for £6.1 million, its loss-making business that makes and supplies lateral flow tests to detect CD4 levels in blood, a measure used in HIV treatment to determine whether a patient needs to be prescribed antivirals. The tests were also made at Alva.
The sale means Omega has exited the diagnostics market and its workforce has reduced from about 350 to 70. The remaining company is now focused on its health and nutrition business in Ely, Cambridgeshire.
Shares in Omega have slumped from more than 90p at about the time the government announced the contract in March 2021 to 3½p last week, valuing the company at just £7.8 million.
Omega has also been caught up in a separate legal dispute between the government and Abingdon Health, another Aim-quoted testing company, based in York. Omega was lined up to help manufacture a Covid antibody test on behalf of Abingdon at Alva as part of the government’s rapid test consortium, formed in April 2020, but Abingdon strug
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